Calm Prevails in Crypto World as Bitcoin Runs Up Against Resistance
Cryptocurrencies resumed their rangebound trading Thursday, as bitcoin’s relief rally showed signs of stalling while Ethereum and the major altcoins were held to break-even.
The combined value of all coins and tokens in circulation is $287 billion, virtually unchanged from the overnight hours.
Bitcoin touched a session high of $6,790.25 but was unable to extend its rally past $6,800. The bulls have been rejected at this level on at least three occasions since Tuesday, a sign the relief rally was losing steam.
The largest cryptocurrency by market cap bottomed around $6,133 on June 13. At the time, the short-term technical indicators supported a further breakdown in price, with $5,900 seen as the next likely target.
Ethereum prices were up a mere 1% Thursday to $534. ETH/USD values reached an earlier high of $542.74, which was not unlike the high from Tuesday.
The major altcoins ranked between nos. 3 and 10 by market cap were virtually unchanged compared with 24 hours ago.
Digital currency prices have shown remarkable progress in terms of stability, as total market values fluctuated within a $4 billion range through the overnight session. Twenty-four hour trade volumes have held just above $12 billion, according to CoinMarketCap.
Bithumb fell to the no. 9 spot based on total volume after the exchange shut down deposits and withdrawals in the wake of a $31 million cyber heist. The exchange has processed $181 million worth of cryptocurrency trades since early Wednesday, which is roughly half of the previous day’s turnover.
In Search of Direction
While cryptocurrencies have exhibited rare price stability over the past nine days, it is too premature to conclude that the bears have relinquished control of the market. The total market is down a whopping 38% from the April swing high and volumes have declined by more than half over that period.
With the exception of the recent attacks on South Korean exchanges, the latest crypto headlines have been mostly positive. If they can be summed up in one theme, it would likely be the growing institutional interest in cryptocurrency.
The San Francisco-based Coinbase exchange has been leading in that capacity by announcing the arrival of crypto custodial services. Goldman Sachs-backed Circle and BitGo are also in negotiation with regulators about launching similar services. Meanwhile, Wall Street custodians JPMorgan Chase & Co and Bank of New York Mellon Corp are reportedly working on custody services that could facilitate digital currency transactions.
While promising, these developments alone won’t be enough to generate the next crypto bull market. For institutional capital to be the driving force of the next major market uptrend, actual custodial services and not merely the promise of them must be deployed.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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